Ecofin, the European Union finance ministers’ council, today decided that Spain and Portugal should be fined and sanctions imposed as both countries failed to achieve their 2015 budget deficit targets.
Both countries also were criticised for not having done enough to make cuts in government expenditure.
The Ecofin decision means that the European Commission has 20 days to decide how much the fines should be, a zero option is not out of the question and the countries’ finance ministers have ten days in which to submit their proposals and reasons that fines and sanctions should not be imposed.
Portugal missed its budget deficit target last year primarily due to the Banif fiasco which costs the unwilling and taxpayer further billions, with liabilities still open.
An additional problem would occur if Portugal or Spain suffered santions which cut either off from EU development spending, thus ensuring their economies were hampered further.
Portugal’s Finance Minister, Mário Centeno says his defence will be to re-explain the government's strategy and show the 2016 results to date, sticking to the government line that "there is no plan B."
"Let's go back to outlining our whole strategy to the European Commission, to show the results we are getting and how with these results we can meet our goals," said Centeno after the Ecofin meeting.
The minister said he had defended Portugal’s position at the meeting, claiming that a fine or sanctions would be unjustified as the country is making great efforts to comply.
Asked about whether the Portuguese government will have to introduce more measures to appease European Commission, Centeno replied that there will be no Plan B and that "the agreed budgetary implementation is being followed to the letter by the Government."
